Mortgage fraud suspects purchased property in Volusia for years

Ramara Garrett is shown in a promotional video from 2007. Christopher Mencis is far left and Jim Sotolongo is seated next to her. The man standing is P.J. Warner, who worked for Waverly Properties and later cooperated with the FBI in their investigation. Garrett, Mencis and Sotolongo, along with Stephanie Musselwhite, are charged in a Volusia County mortgage fraud scheme.

Published: Tuesday, April 23, 2013 at 5:27 p.m.

Last Modified: Wednesday, April 24, 2013 at 4:20 p.m.

DAYTONA BEACH -- The two private investigators who uncovered the multimillion dollar mortgage fraud scheme that led the FBI to arrest real estate broker-investor Ramara Garrett, her boyfriend and two other people said the group landed in Volusia County about eight years ago after pulling off similar operations in other parts of Florida.

The investigators, Mike Hullett and Dave Simpson of Hullett Investigative Services in Orlando, also said the group of four — Garrett, her live-in boyfriend Jim Sotolongo, mortgage broker Chris Mencis and title agent Stephanie Musselwhite — began doing business in Volusia County in 2005, dealing mainly with expensive oceanfront and riverfront properties in Port Orange, Ponce Inlet and Wilbur-by-the-Sea.

Hullett said Sotolongo, who lived in Orlando at the time, introduced himself to Mencis as an investor. Mencis then brought Sotolongo to Volusia and introduced him to a real estate agent. Mencis also introduced Sotolongo to Musselwhite, who at the time lived in Seminole County. Garrett and Sotolongo — married to other people at the time — had met the year prior at a function in Orlando, Hullett said.

When Hullett's own father, Orlando businessman John Hullett, did some business with Sotolongo in 2007 and the transaction soured, the two private investigators began looking into Sotolongo's business dealings and discovered a pattern.

Hullett and Simpson took their suspicions of mortgage fraud to the Florida Department of Law Enforcement and fraud investigators there turned it over to the FBI.

A little more than three years later, on March 29, Garrett, Sotolongo and Musselwhite were arrested by FBI agents and charged with conspiracy to defraud financial institutions for the purpose of influencing the banks on mortgage loan approvals, a complaint affidavit shows. Mencis, who was living in North Carolina, surrendered and was arrested five days later on April 4.

The four defendants were the focus of a three-year investigation by the FBI's Fraud Task Force. FBI Agent Robert Robichaud wrote in a complaint that Sotolongo, Garrett, Musselwhite and Mencis, as well as other co-conspirators who have not been charged, were part of the "Sotolongo Mortgage Fraud Ring."

Robichaud said that for seven years between 2005 and 2012 the group made false statements to financial institutions and launched a scheme to defraud the banks in order to obtain loans for upscale properties, some valued in the millions of dollars, the complaint affidavit shows.

The four ran several companies between them, including Garrett's Waverly Property Group LLC, Daytona Beach Luxury Rentals LLC, and Waverly Media LLC.

Garrett and Sotolongo, according to the complaint affidavit, lived in a handful of the residences they had obtained through fraudulent means. They are currently living in an oceanfront house in Wilbur-by-the-Sea that Robichaud mentioned in the complaint affidavit.

All four are out on signature bonds, but Sotolongo's was the highest at $250,000. Sotolongo is also wearing an ankle monitor. Sotolongo, Garrett and Musselwhite are scheduled to appear in court in Orlando for a hearing on Thursday.

Hullett and Simpson were relieved when the group was arrested and charged.

"I've told Jimmy (Sotolongo) face to face that we were going to put him in federal prison," Simpson said. "I'm just happy that something is happening."

Simspon said neither he nor Hullett ever made a secret about the fact they were investigating the four suspects. That's why both of them bristled when Mencis told The Daytona Beach News-Journal after his arrest that he had no knowledge of the mortgage fraud operation and had been a victim of Sotolongo's.

Both men said they had met with Mencis together and separately, and he was fully aware of the scheme.

"He came to our office and we laid out flow charts with all the companies and all the players involved in the scheme," Simpson said.

Hullett said he met with Mencis at an Olive Garden restaurant in Asheville, N.C., last year and laid all the investigative paperwork out on the table over a three-hour period. Hullett also pulled the cards of three FBI agents from his pocket and put them in front of Mencis.

Earlier this week, Garrett, 34, gave birth to her fourth child, a girl fathered by the 47-year-old Sotolongo. The couple, as well as Mencis and Musselwhite, have been charged with one count each of conspiracy to defraud the United States, an offense punishable by up to 20 years in prison.

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